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July 29, 2015
CARLTON DOLE DIRECTOR OF BUSINESS DEVELOPMENT
ECONOMICS OF THE PERMIAN CONDENSATE TRADE
THE CHANGING DYNAMICS FROM 2014 TO 2015… 2016 & THE BRIGHT FUTURE AHEAD
BARRELTEX “THE BIGGER BETTER BARREL BROKERS”
832-768-5479
¡ Lease Condensate Approximately 200MB/D API 50-65 -Currently Crude Blended -2016 Seg. Ship Pipe PC/Split/Export ¡ Plant Condensate At Least 54MB/D (C5=39 GP=15) API 66+ -Diluent, Naphtha Pool, Last Year Canadian MKT
PERMIAN CONDENSATE PRODUCTION
¡ HYPOTHESIS 2016+ Less Lease Conde Blended & Less to Cushing -Take Away Capacity to GC Mid/Cush Mid/LLS GC Short ¡ Plant Conde 2014 Mid/CRW -$14 Now Mid/CRW +$4
¡ Shifting Fundamentals for Permian Condensate ¡ API in 50s & low 60s: Crude Blend or Cactus & Mid-Sealy -Lease Conde Cactus to GC: Splitter, Pet Chem, Stabilized-Export -Stabilized 50-65 API Mid-Sealy to GC: Splitter, Pet Chem, Export
A CAPTIVATING YEAR IN CONDENSATE
¡ Fundamental Drivers Cushing Inventory, Mid Refineries, Takeaway
¡ Midland bears 65% price crash & Perm has “triple-play” sweet spots
MIDLAND/CUSHING DIFFERENTIAL
2015 2012 - 2014
Midland Trades Premium
Inflection Point Midland -$17.50 Discount
¡ 2014 Range MID/LLS -$5 to -$20 ¡ Current MID/LLS -$3 ¡ 2016 Futures Calendar 2016 Avg. Implies MID/LLS -$3.50
MIDLAND TO GULF COAST OVERVIEW
TAKEAWAY OVERVIEW
¡ Mesa, Basin, Sunrise Trunklines feed Colorado City
¡ Longhorn 275MB/D $2.50 ¡ Permian Express I & II 350MB/D I $1.93 - $2.63 II $2.10-$2.90 ¡ BridgeTEX 300 MB/D $2.38 - $3.84 ¡ Cactus 250MB/D Gardendale 120MB/D Stabilizer $1.50 - $2.50 ¡ Midland-Sealy 2017 Planned 540MB/D 4-Grades Batched Conde
PERMIAN TO GULF COAST PIPELINES
¡ Upton County (Odessa) 55 API Condensate FOB Lease Mid -$6.50 ¡ Local (1.50) to Mid blend to 42 ($3) Sell Midland -$1 ¡ (Cush) (1 .50) Odessa Station, $1 Basin, .50 Shrink, T/S $1, Cush - .50
¡ To Crane ($2), blend 44 API(2.50), LH(2.50), T/S $1, LLS -2.50 ¡ To McCamey ($2.25), Cactus 1.50, Corp 1.25 *LLS -$4 (Split/PetChem) ¡ To McCamey ($2.25), Cactus 1.50, Stab. 1 .50, Corp 1.25 *LLS -$4 Ex Dock
¡ *Current Corpus MKT LLS -$4 Consider Future Demand & Export ¡ 2016 GC Conde 850MB/D Production & 1.5MMB/D Processing
PERMIAN OPTIONALITY EXAMPLE
¡ Let’s continue discussing these developments in 2016 ¡ Linked-In Carlton Dole ¡ [email protected] 832-768-5479 ¡ Stay Informed on Condensate Developments Join Linked-In
Group “Condensate North America”
LETS STAY CONNECTED
QUESTIONS